House Report Blames FDA for Drug Shortages

WASHINGTON -- The recent nationwide shortages of critical drugs, including oncology agents, are largely the FDA's fault, according to a congressional committee report.

Since Margaret Hamburg, MD, became FDA Commissioner in 2010, "the FDA has failed to ensure that enforcement and compliance activities are conducted in a manner that does not create unnecessary shortages of critical drugs," reads the report issued by the House Committee on Oversight and Government Reform.

The committee said that "although the shortages have been attributed to a myriad of factors from a lack of raw materials to increased demand, [an investigation found that] the crisis was largely sparked by actions of the Food and Drug Administration."

When the FDA responds to a manufacturing problem involving producers of generic injectable drugs, the result is that "companies producing generic injectable drugs have taken their manufacturing off-line simultaneous to other generic competitors also going off-line. These simultaneous shutdowns diminish the ability of competitors to alleviate the shortages with increased production," the report noted.

The FDA's regulatory interference in the production process has "effectively" forced the shutdown of 30% of the total manufacturing capacity of four of the largest manufacturers of injectable drugs: Bedford Laboratories, Hospira Pharmaceuticals, Sandoz Pharmaceuticals, and Teva Pharmaceuticals, according to the committee, which is chaired by Rep. Darrell Issa (R-Calif.).

Of the 219 drugs listed on the American Society of Health System Pharmacists shortage list as of Feb. 21, at least 128 (58%) were produced by at least one facility undergoing FDA remediation, according to the report. A committee review of those manufacturer shutdowns over the last 2 years "did not find any instances where the shutdown was associated with reports of drugs harming customers."

Another cause of the drug shortage is market concentration, which can be traced to a provision of the Medicare Modernization Act, the report continued. The provision "dramatically reduces" Medicare's reimbursement for generic drugs, especially older generics. Manufacturers don't want to raise their prices for the drugs above what Medicare is paying providers to administer them, so they end up losing money on those drugs, which include generic injectable oncology drugs.

Because drugmakers don't want to keep making a product they are losing money on, "it is not surprising that many of the drugs on the shortage list are generic oncology drugs," the report asserted.

Group purchasing organizations (GPOs) made up of large hospital and clinic networks that negotiate big contracts to purchase particular drugs have further concentrated the market since only large manufacturers can produce drugs at the price negotiated by the GPOs and still make a profit, the report authors noted.

The committee recommended that a "common sense approach" to regulation of drugmakers be restored at FDA. "When problems that do not pose an immediate threat to public safety are detected, directing facilities to make targeted improvements under close supervision of the FDA can be a more appropriate response than actions that lead companies to shut down manufacturing lines," the authors suggested.

"While such a response may place inconvenient burdens on the FDA's bureaucracy, greater use of such a targeted approach would have significantly diminished the public health crisis the country is facing from the abundant number of drug shortages."

The report also recommended that the agency be required "to consider the implications of its actions on the nation's supply of critical drugs," and that Congress reform Medicare's drug payment system so that it takes into account the current supply and demand conditions.

The committee suggested that proposals to let drugmakers share information about their manufacturing capabilities and product availability might be worth considering, although that might leave open the possibility for collusion among the companies.

In December, the Government Accountability Office recommended that the FDA be allowed to mandate that drug companies be required to warn the agency when they think a shortage of a particular drug is imminent, so plans could be made to alleviate the shortage. That idea was incorporated into the Senate version of the recently passed user fee bill.

And at its annual meeting on Tuesday, the American Medical Association endorsed the idea of requiring drug manufacturers to give FDA "at least 6 months' notice, or as soon as is practicable" if they anticipate discontinuing manufacture of a particular drug, whether permanently or temporarily, according to an AMA press release.

The association also supported the creation of a task force to help the Department of Health and Human Services better address the shortages.

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